Mark Karpelès Details Mt. Gox Collapse and Detention

Mark Karpelès, the former CEO of the defunct Bitcoin exchange Mt. Gox, is currently building a VPN and an AI automation platform in Japan. As Chief Protocol Officer at vp.net, he works alongside Roger Ver and Andrew Lee on a VPN that uses Intel SGX technology to allow users to verify server code. Karpelès is also developing an unreleased AI agent system at shells.com that grants artificial intelligence full control over a virtual machine.

The article recounts the history of Mt. Gox, which Karpelès acquired from Jed McCaleb in 2011. He alleges that 80,000 bitcoins were stolen prior to the handover and that he inherited a platform with poor code. The exchange eventually collapsed in 2014 after hacks drained over 650,000 bitcoins, later tied to Alexander Vinnik and the BTC-e exchange. Karpelès was arrested in 2015 and spent 11.5 months in Japanese custody, enduring solitary confinement and psychological pressure. He eventually cleared embezzlement charges by identifying $5 million in unreported revenue.

In late 2025, Mark Karpelès is leading development at vp.net, a VPN service that utilizes Intel's SGX technology. As Chief Protocol Officer, he emphasizes that the service allows users to verify exactly what code runs on servers. "It's the only VPN that you can trust basically. You don't need to trust it, actually, you can verify," Karpelès stated. He works alongside Roger Ver and Andrew Lee, the founder of Private Internet Access.

Karpelès is also working on a personal cloud computing platform called shells.com. Here, he is quietly developing an unreleased AI agent system designed to hand artificial intelligence full control over a virtual machine. The system aims to allow AI to install software, manage emails, and handle purchases with planned credit card integration. "What I'm doing with shells is giving AI a whole computer and free rein on the computer," he explained, describing the concept as AI agents on steroids.

Karpelès' journey into Bitcoin began in 2010 while operating a web hosting company called Tibanne. A customer based in Peru requested to pay for services using Bitcoin, making Tibanne one of the first companies to implement Bitcoin payments. Roger Ver, an early evangelist, became a frequent visitor to Karpelès' office. However, an anonymous purchase of a domain linked to Silk Road hosted on his servers later fueled investigations by U.S. authorities, who briefly suspected Karpelès of being Dread Pirate Roberts.

In 2011, Karpelès acquired Mt. Gox from Jed McCaleb, who went on to found Ripple and Stellar. Karpelès alleges that between signing the contract and gaining server access, 80,000 bitcoins were stolen, and McCaleb insisted they not tell users. Despite inheriting a platform plagued by technical issues, Mt. Gox exploded in popularity, processing the vast majority of global Bitcoin trades. Karpelès maintained strict policies, banning users linked to illicit activities such as drug purchases on Silk Road. The empire crumbled in 2014 when hacks, later tied to Alexander Vinnik and the BTC-e exchange, drained over 650,000 bitcoins.

The fallout from the Mt. Gox collapse led to Karpelès' arrest in August 2015. He endured eleven and a half months in Japanese custody, a system known for rigidity and psychological pressure. He was held in early detention alongside Yakuza members, drug dealers, and fraudsters, where he taught English and was dubbed "Mr. Bitcoin" after inmates spotted blanked-out headlines in newspapers. One Yakuza member even attempted to recruit him for post-release contact.

Japanese police employed psychological tactics, including repeated rearrests. After 23 days, detainees were led to believe release was imminent, only to face a new warrant. "They really make you think that you're free and yeah, no, not you're not free," Karpelès said. He was later transferred to Tokyo Detention Center, where he spent over six months in solitary confinement on a floor shared with death row inmates. Forbidden from letters or visits if claiming innocence, he coped by rereading books and writing stories.

Armed with 20,000 pages of accounting records and a basic calculator, Karpelès dismantled embezzlement charges by uncovering $5 million in unreported revenue within the exchange. Paradoxically, prison improved his health; chronic sleep deprivation from his workaholic days gave way to regular rest. The 650,000 bitcoins stolen remain at large, and Karpelès expressed that "it doesn't feel like justice has been served" regarding Alexander Vinnik, who pleaded guilty in the U.S. but was returned to Russia without a trial.